March 2010

Credit Checks for Employment Purposes

In February 2010, the Oregon House and Senate approved Senate Bill 1045. The bill creates new parameters on an employer’s right to obtain and use a individual’s credit history as a basis for employment decisions. Under the bill, an employer will no longer be permitted to obtain or use an individual’s credit history as the basis for any employment decision including; hiring, firing, issuing discipline and the like. The bill has carved a number of exceptions. For instance, federally insured banks and credit unions are exempt as are employers that are required by law to use the information for employment purposes. Moreover, if the need for the credit information is “substantially job related” and the employer advises the employee as to the basis for the request and use of the information, it may be permissible. If your company employs a policy that permits procurement and use of employee credit information, the policy should be reviewed to determine compliance with the new law.